U.S., South African hostages killed in rescue attempt in Yemen

A U.S. journalist and a South African teacher held by al Qaeda militants in Yemen were killed along with some of their captors during a night rescue attempt by U.S. and Yemeni forces in a remote desert village, officials said on Saturday.

U.S. Secretary of State John Kerry and a Yemeni intelligence official said Luke Somers, 33, and South African Pierre Korkie were shot by their kidnappers shortly after the raid began in the arid Wadi Abadan district of Shabwa, a province in southern Yemen long seen as one of al Qaeda's most formidable strongholds. 

Kerry said the operation, the second attempt to free Somers in 10 days, had only been approved because of information that the American's life was in imminent danger.

However, the Gift of the Givers relief group, which was trying to secure Korkie's release, said it had negotiated for the teacher to be freed and had expected that to happen on Sunday and for him to be returned to his family. 

Al Qaeda in the Arabian Peninsula (AQAP) is seen by Washington as one of the movement's most dangerous branches. The United States has worked with the Yemeni government and via drone strikes to attack its leadership in southern and eastern parts of Yemen.

"The callous disregard for Luke's life is more proof of the depths of AQAP's depravity, and further reason why the world must never cease in seeking to defeat their evil ideology," President Barack Obama said in a statement. 

He said he had authorised the attempted rescue and said the United States would "spare no effort to use all of its military, intelligence and diplomatic capabilities to bring Americans home safely, wherever they are located".

Somers was moved from the scene of the rescue attempt but died later from his wounds, a senior official in the Yemeni president's office said.

Gift of the Givers said on its website: "We received with sadness the news that Pierre was killed in an attempt by American Special Forces, in the early hours of this morning, to free hostages in Yemen." 

It added: "The psychological and emotional devastation to (Korkie's wife) Yolande and her family will be compounded by the knowledge that Pierre was to be released by al Qaeda tomorrow ... Three days ago we told her 'Pierre will be home for Christmas'."

A South African government spokesman declined to comment.

There was no new information about three other hostages, a Briton, a Turk and a Yemeni, who had previously been held alongside Somers and Korkie, a Yemeni security official told Reuters.

Lucy Somers, the photojournalist’s sister, told the Associated Press that she and her father learned of her brother's death from FBI agents at 0500 GMT (12 a.m. EST) Saturday. 

"We ask that all of Luke's family members be allowed to mourn in peace," she said from London.

IMMEDIATE DANGER

Kerry said the decision to mount the raid was based on fears that AQAP planned to kill Somers.

"Earlier this week, AQAP released a video announcing that Luke would be murdered within 72 hours. Along with other information, there was a compelling indication that Luke's life was in immediate danger," Kerry said.

U.S. officials on Thursday said American forces had already attempted to rescue Somers, without giving details. Yemeni officials had previously disclosed the release of six Yemenis, a Saudi and an Ethiopian hostage in a raid on Nov. 25.

There were contradictory accounts of how Saturday's raid unfolded and how many of the kidnappers were killed. A Yemeni official said on Saturday morning that 10 al Qaeda suspects had died in the raid.

A U.S. official, speaking to Reuters on condition of anonymity, said American special forces had conducted the operation alone at 1 a.m. in Yemen, but that the kidnappers had been alerted to their approach shortly before they arrived. 

The official said the kidnappers then "executed" the hostages, who each sustained multiple gunshot wounds. One died during the flight out and another aboard a U.S. ship.

At no point was there an exchange of fire in the part of the compound where the hostages were being held, the source said, and at no point did U.S. forces shoot into that part of the building. 

A senior U.S. official said Yemen's President Abd Rabbu Mansour Hadi had given his support for the operation.

Although the United States knew there were two hostages at the location, and that one of them was Somers, it did not know that the other was Korkie, the senior Washington official said.

The rescue team was made up of about 40 members of Special Operations forces, and the raid lasted about 30 minutes from start to finish, said the U.S. officials. 

Yemen's government said in a statement carried on state media that its security forces had led the raid. It said the security forces had surrounded the house and called on the kidnappers to surrender, but they instead shot the hostages.

That led to an assault on the building in which four Yemeni security officers were also wounded, it said. The statement said the house belonged to suspected militant Saeed al-Daghaari, which another Yemeni security source told Reuters it was in the village of Dafaar in the Wadi Abadan district of Shabwa.

"It's a very small village with only 20-40 houses. There were very quick clashes with the gunmen and then it was all finished," a tribal source from the area said.

AQAP on Thursday released a video showing a man it said was Somers saying: "I'm looking for any help that can get me out of this situation. I'm certain that my life is in danger". Reuters was not able to independently verify the authenticity of that video, which was reported on by SITE Monitoring. 

U.S. holiday shopping discounts deepen, last longer

Amarilis Sinchi visited Macy's at a New Jersey mall on Black Friday, but she waited until this week to purchase the red fleece pajamas she had her eye on.

The 21-year-old student ended up paying $13 at the department store, down from $30 on Friday, which has traditionally been the best day for deals during the U.S. holiday season. "The prices keep getting better," she said, planning a return to another store - Kohl's - which had dropped the price on LEGO toys.  

Retailers started discounting early this holiday season, but that hasn’t stopped them from stepping up the offers now, particularly on apparel. The increasingly fierce struggle for consumer dollars online is adding to pressure for lower prices at stores, where mobile device-toting customers compare prices as they shop.

Many deals are being extended and deepened, visits to malls and data from price tracking firms show, and analysts see many retailers' margins being compressed, especially in apparel.  

"We’re experiencing post-holiday promotions even before the holiday is in full swing," said Steven Barr, U.S. Retail and Consumer Leader at consultants PwC, who has not seen such a high level of deals at this stage of the season before. On one trip to a mall, an apparel store dropped a discount from 40 percent to 50 percent while he ate lunch.

“We expect this is going to be the most promotional holiday on record,” challenging profits in the sector, he said.

Consumers remain cautious about spending despite lower gasoline prices and an improved jobs and housing market, surveys by Reuters/Ipsos show. Wages growth has been very limited while food and healthcare costs have risen.

People do generally appear to be getting more price conscious. In a survey this summer conducted by PwC, 84 percent of respondents said they chose a store because of the prices it offers, up from 74 percent in 2013.

The 10 retailers with the most traffic and sales more than doubled the number of discounted items online during the week after Black Friday, according to data from TrackIf, a service that tracks prices across nearly 2,000 retail websites.

To be sure, retailers with unique or popular products have avoided big price cuts, and there is substantial variation between companies and types of merchandise. Many retailers have gone into the season with less inventory than previous years, and mainstream forecasters expect holiday sales will rise around 4 percent for the year, despite the discounting.

But already some retail earnings and stock prices are being hurt by weak sales and the increased level of discounting, in particular at teen clothing store chains. Teen buyers preferring to spend on phones and gadgets rather than clothes has been hurting that sector for some time.

SOME RETAILERS HURT BADLY

Shares of teen retailer Aeropostale dropped Wednesday to a 52-week low after it reported a larger-than-expected fourth-quarter loss. Like apparel retailers Express and Abercrombie & Fitch, Aeropostale was hurt by discounting and slowing demand. On Friday, teen retailer Delia*s said it would file for bankruptcy.

"The gross margins are being pressured," said Nomura retail analyst Simeon Siegel. Apparel retailers, he said, can't cut prices much more than 50 percent without losing money, so many are trying to win sales by extending the time they offer discounts.

Companies that track discounts can discern a significant change. Last year, online prices from traditional retailers were lowest on Black Friday for a variety of products in many categories, according to Market Track. But this year, for instance, it found prices of kitchenware fell in the days after Black Friday, by 13 percent at Sears and 47 percent at Macy's.

ShopSavvy, which tracks merchandise and prices for the top 100 online and in-store retailers based on their traffic and sales, compared discounts in five categories of items at 32 of these merchants on Black Friday and early this week. Computers, clothing and home and garden products showed widening discounts. Electronics and entertainment products were cheaper on Black Friday itself.

ShopSavvy CEO John Boyd said that the rise of mobile and online commerce was driving retailers to spread discounts beyond Friday. This year's move toward post-Black Friday bargains was "materially stronger" than previous years, he said.  

Most stores also didn't wait until the holiday weekend to start discounts, said ShopSavvy, which also found that many of the big retailers were offering the same deals as online retailer Amazon.com.

Ecommerce researcher Profitero found online discounts of some 41,000 toys, electronics and sporting goods at Amazon, Best Buy, Toys R Us and Walmart held steady on this week's Cyber Monday compared with last week's Black Friday.

A Macy's spokesman said the retailer plans its promotions in advance. Other retailers declined to comment on holiday pricing strategies.

Standing in the Newport Centre mall in Jersey City, New Jersey, that he has visited regularly over the last eight years, Moody's analyst Charles O'Shea said that while he's seen strong sales of electronics at stores like Best Buy and Target, many apparel retailers already were marking down merchandise.

Walking into a Sears store, he flipped over tag after tag, showing deep discounts on almost all apparel. Some stores, such as American Eagle, were offering shoppers the chance to buy one item and get 50 percent off a second.

Standing outside an Aeropostale, O'Shea pointed at a sign advertising up to 70 percent off. Inside, stacks of neatly folded sweaters were marked down to $14 from $44.50.

That's a good indication that Thanksgiving holiday weekend sales "weren't what they wanted," he said. "They have to get stuff out of there."